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question - Refer to the effects or consequences on the general balance of the tariff: small...

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Refer to the effects or consequences on the general balance of the tariff: small country case

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Answer #1

Answer:
Consequences of the general balance of the tarrif in case of small country are given below:

  • When tarrif imposing country is small, the price of the imported goods to the consumers and producers will increase by the same amount how much tarrif is being imposed on that particular good.
  • The international price of the good will remain unaffected because the volume of trade being done by the small country won't be affecting international trade balance that much.
  • The revenue collected by the government in the form of tarrifs will be used to subsidise public consumptions like schools, health services and construction of road projects.
  • Tarrif not only decreases imports but exports as well for tarrif imposing country.

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